Description

The President of India, through Ministry of Railways, proposes to sell up to 26,13,70,120 equity shares (2% of paid-up capital) of IRFC via OFS mechanism on BSE and NSE, with an oversubscription option for an additional 2%.

Summary

The President of India, acting through the Ministry of Railways, Government of India (the Promoter and Seller), has notified BSE and NSE of a proposed Offer for Sale (OFS) of equity shares of Indian Railway Finance Corporation Limited (IRFC). The base offer size is 26,13,70,120 equity shares of face value ₹10 each, representing 2% of the total paid-up equity share capital. An oversubscription option for an additional 26,13,70,120 shares (2%) is also available, bringing the maximum potential divestment to 4% of total issued and paid-up equity share capital.

Key Points

  • Seller: President of India, acting through the Ministry of Railways, Government of India
  • Company: Indian Railway Finance Corporation Limited (IRFC)
  • Base Offer Size: 26,13,70,120 equity shares (2% of total paid-up capital)
  • Oversubscription Option: Additional 26,13,70,120 equity shares (2% of total paid-up capital)
  • Maximum Divestment: 4% of total issued and paid-up equity share capital
  • Face Value: ₹10 per equity share
  • Stock Exchanges: BSE Limited and National Stock Exchange of India Limited (NSE)
  • Regulatory Framework: SEBI Master Circular (SEBI/HO/MRDPoD2/CIR/P/2024/00181 dated December 30, 2024), BSE OFS Circular (20240701-19 dated July 1, 2024), NSE OFS Circular (93/2024 dated July 12, 2024)

Regulatory Changes

No new regulatory changes are introduced. The OFS is conducted under the existing SEBI Master Circular for stock exchanges and clearing corporations pertaining to comprehensive guidelines on offer for sale of shares through the stock exchange mechanism, along with applicable BSE and NSE OFS operational guidelines.

Compliance Requirements

  • The OFS is restricted from release, publication, or distribution in the United States (except to Qualified Institutional Buyers as defined) and other restricted jurisdictions.
  • The transaction must comply with SEBI OFS Guidelines, BSE OFS Circular, and NSE OFS Circular.
  • Equity shares must be held in dematerialized form in one or more demat accounts with the relevant depository participant.
  • Non-retail investors may participate on T day (February 25, 2026); retail investors and employees participate on T+1 day (February 26, 2026).

Important Dates

  • Notice Date: February 24, 2026
  • T Day (Non-Retail Investors only): February 25, 2026
  • T+1 Day (Retail Investors, Employees, and non-Retail Investors carrying forward un-allotted bids): February 26, 2026

Impact Assessment

This OFS represents a significant government divestment in IRFC, a major public sector entity under the Ministry of Railways. The sale of up to 4% of total equity (if the oversubscription option is fully exercised) is likely to see substantial participation from both institutional and retail investors given IRFC’s prominence. The two-day window structure (T and T+1) provides phased access, with non-retail investors having priority on day one. Market participants should expect increased trading volumes in IRFC shares on BSE and NSE during the OFS window. The geographic distribution restriction (excluding the US and other jurisdictions except for QIBs) limits international participation to qualified buyers.

Impact Justification

Large-scale government divestment of a major public sector enterprise involving 2-4% of IRFC's total equity capital through the stock exchange OFS mechanism, directly affecting retail and institutional investors across BSE and NSE.